CVP ANALYSIS

XX Corp. can adopt one of two production models. The first has fixed cost per period of $1000 and unit variable costs of $1. The second has fixed costs of just $400 but variable costs of $4 per unit. 1. If the period production volume is expected to be 150 units, which method will make highest profit (lowest total cost)? 2. The sales price is $10 per unit. For each possible production model, draw a CVP diagram to show the breakeven point and calculate the volume required to breakeven. 3. Which production method would you choose? Is there a right answer and why?